The USDCAD saw an aggressive move lower last Friday after Canada delivered a second straight month of stronger-than-expected employment gains. That upside surprise for the Canadian economy produced a decisive shift in sentiment and triggered a sharp downside push in the pair. In the process, the price broke below both the 100-day and 200-day moving averages at 1.3907 and 1.3886, marking a meaningful technical deterioration. Once below those key longer-term trend indicators, the selling accelerated, driving the pair through the 50% retracement of the entire May–June rally at 1.3839. Momentum ultimately carried the decline toward the 1.3800 psychological area, where the market printed a low at 1.37986 during yesterday’s North American session.
After that extended fall, the pair finally found some footing as the broader U.S. dollar strengthened on Monday, allowing USDCAD to rebound back above the 50% midpoint at 1.3839. However, the recovery showed clear signs of stalling. The rebound topped out near 1.3856 yesterday, and today’s high again struggled around that same zone—well ahead of the 38.2% retracement of last Thursday’s decline, which sits at 1.38657. That inability to even test, let alone break, the first major Fibonacci resistance level tells an important story: buyers lack conviction, and the upside simply does not have the momentum needed to challenge the dominant bearish shift.
If the price can break and hold below 1.38657, the sellers retain the firm technical advantage. They forced the breakdown through key moving averages, they defended the first pullback, and they continue to dictate the terms of the battle.
The buyers, by contrast, are not doing enough—failing to reclaim lost ground or generate any sustained push through resistance.
For now, the burden remains squarely on the buyers to prove they can turn the tide
